The Minister of Power, Adebayo Adelabu, has announced that the Federal Government will begin paying off part of its debts to power generating companies and gas suppliers starting from April.
Adelabu made this announcement during a working visit to Egbin Power Plc in Lagos State on Thursday.
He emphasized the importance of addressing the debts owed to stakeholders in the power sector to ensure the smooth operation of power assets like Egbin Power Plant.
Adelabu assured the management of Egbin Power Plc that the government would prioritize payments to alleviate their financial burden and incentivize them to continue operations.
Addressing the gas shortage issue, Adelabu mentioned discussions with the Minister of State for Petroleum Resources (Gas) and plans to provide financial injections to gas suppliers.
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Additionally, he highlighted efforts to allow gas suppliers access to Nigeria’s gas wells to help offset outstanding debts gradually.
Adelabu stated that meetings with the Minister of Finance and Minister of Budget and Economic Planning have yielded promises of funds to start paying down these debts, with impacts expected to be seen from April.
Mokhtar Bounour, the CEO of Egbin Power, expressed concerns over revenue loss due to gas shortages, which have limited the plant’s capacity to generate power.
He emphasized the urgency of addressing gas availability issues to sustain operations and mitigate financial challenges.
Bounour also highlighted the significant debt owed to Egbin Power by the Federal Government, amounting to N1.4 trillion.
He expressed optimism that the promised improvements, starting from April, would help alleviate liquidity issues and ensure the sustainability of the business.
The Federal Government’s outstanding debts to gas companies were previously reported to be up to $1.3 billion, as stated by Minister Adelabu in February.
